Bloomberg Launches Blended Gold and Bitcoin Indices

Bloomberg has announced the launch of Bloomberg Bitcoin & Gold Blend Indices, which it says is “some of the first multi-asset indices to market that combine commodities and digital assets components”.

The new indices include the Bloomberg Bitcoin and Gold Equal-Weighted Index (BBIG), and the Bloomberg Dollar, Bitcoin and Gold Equal-Weighted Index (BBUG).

After what it terms “a landmark year” for cryptocurrencies in 2024, Bloomberg says the impact of favourable regulations and sentiment shepherded in over $220 billion in crypto investments according to its data. These assets were across 250+ ETFs, including those linked to spot bitcoin and spot ethereum which expanded access to crypto markets using a familiar wrapper.

Gold and bitcoin both reached new peaks over the year, further bonding the relationship between digital and physical assets, it continues, adding that investors began to explore their competing and complementary attributes in diversified portfolios.

The new indices are the first in a new set, the firm says, adding they were developed with a unit-based framework allowing for future modification and customisation of building blocks and weight based on client interest. The indices aim to capture bitcoin’s growth, coupled with gold’s historic stability.

The BBUG Index combines the dollar’s defensive attributes with bitcoin and gold’s potential, long-term uncorrelated characteristics. Bloomberg says bitcoin and gold have historically a nearly zero correlation with each other but maintain positive long-term returns making their basket a potential positive diversifier to traditional multi-asset portfolios.

“We expect the Bloomberg Bitcoin and Gold basket to be the first of many commodities and digital asset blends as we see an increasing investor appetite for tailored indices that can target specific investment objectives and return profiles,” says Jigna Gibb, head of commodities & crypto index products at Bloomberg Index Services Limited. “With Bloomberg Indices’ capabilities, we’re able to continuously customise index offerings as the industry evolves. As a key investment hurdle in bitcoin is elevated volatility, we see a fundamental case for using bitcoin and gold, not bitcoin versus gold.”